Bumps in Iran’s entry into the international housing market – Tejaratnews

Iraj Gulabtunchi, the secretary of the construction companies syndicate, emphasizes the high capacities of Iran’s construction industry for the export of technical and engineering services, but considers the embargo as the main obstacle in the way of exploiting this potential.

Zainab Mokhtari / Tejarat News, the promise of building housing in other countries is repeated while the domestic housing market is facing increasing inflation due to lack of production and supply. The country’s annual need for new housing is estimated to be at least one million units, and this is despite the fact that, according to statistical data, only 90,290 building permits have been issued for all urban areas this spring, which is compared to the same season last year. It shows a 12.7 percent decrease. Meanwhile, the lack of housing for real buyers has caused the housing market to experience unprecedented inflation and has imposed a 30% price increase on effective applicants over the past year.

Technical Services; Export or escape?

The problem of lack of housing in Iran and the government’s inability to complete projects is so serious that last November there were even whispers about China entering the Iranian housing market. Although China’s direct entry into Iran’s housing construction field was later denied by the Minister of Roads and Urban Development, it was said at the same time that the construction technology will be imported by the Chinese, which can reduce housing prices by 30%. These statements, along with the negotiations with the Chinese parties, which were also confirmed by the Minister of Roads, raised a lot of criticism regarding the rejection of Iran’s private sector and negotiations with foreigners to build houses and exploit Iran’s thirsty market.

Suppression of the private sector

The government’s inattention to the capacities of residential unit builders and stonewalling in the path of their participation in the construction of private and government projects has caused a wave of housing builders’ capital withdrawal from the construction market of Iran and Koch to countries such as Turkey, Tajikistan and Turkmenistan. Meanwhile, Iran’s private sector had expressed readiness even in the field of national housing construction, but in the end could not reach a final and serious agreement with the government. Investigations by the Chamber of Commerce indicate that about one billion dollars of capital is taken out of the country every month, and a large part of it is settled in the housing markets of neighboring countries.

Service delivery capacities

It is said that currently Iran has a high potential for exporting technical and engineering services. Currently, the number of certified contractors in the country is equal to 54,898 companies and the number of consulting engineers is estimated at 3,665 companies, which indicates a capacity equivalent to 200 billion dollars. In addition to ready-to-work engineers, we can mention other skilled workers such as plasterers, welders, and workers in other fields in the construction field who can participate in the issuance of engineering services. However, statistics show that over the past 10 years, the export of technical and engineering services has decreased sharply due to bank sanctions and administrative bureaucracies, and has reached 1.8 billion dollars from 4.1 billion dollars in 1990. This is despite the fact that Iran has almost lost Iraq’s housing market in recent years and some projects in this country have been closed.

Potentials of construction craftsmen

In an interview with Tejarat News, Iraj Gulabtunchi, Secretary of the Syndicate of Construction Companies, emphasized: Our technical and engineering services are very high, especially in the construction industry and the construction of residential and commercial units; Major companies in the country’s contracting field are construction contractors who have had many successful experiences both inside and outside the country and have implemented projects in many countries of South America, Africa, Iraq and other parts of the world. In this way, both in terms of software and hardware, as well as human power and machinery, they have high power and capacity.

Sanction barrier

Gulabtunchi stated: But the problem is in obtaining bank guarantees to enter the target markets and participate in tenders, which is caused by sanctions. In order to participate in tenders or get projects, companies must deliver bank guarantees to the organizer, but currently they cannot get these guarantees due to sanctions. This is the biggest challenge facing the exporters of technical and engineering services.

The importance of the government’s role in removing obstacles

He added: If we want to use the capacities of this sector, the only way to get the projects is for the government officials to enter into negotiations with the authorities and foreign parties and in this way create conditions that our companies, due to their ability and knowledge of the markets They are able to get projects abroad; For example, in the form of memorandums written between Iran and foreign countries, contractors can use their capacities. In the past years, there have been these memorandums; For example, in the countries of South America, contractors have been operating in the form of these agreements.

The Secretary of the Syndicate of Construction Companies, Kordak, says that the other way is for the space to be open and for private companies to be able to negotiate directly and enter the construction sector of foreign countries. But this also requires a guarantee. But in general, the private sector of the country can very well implement such projects, even though it has already done this in other parts of the world.

Solving problems with interdepartmental cooperation

Gulabtunchi added: Of course, there are other problems in this field, but these problems can be solved by coordinating with the bodies involved in the issuance of technical and engineering services. One part is the assistance of the government, and the government has shown that it is interested in issuing technical and engineering services and activating this area, and based on this, it solves the problems; But in fact, the problem of bank guarantee is serious and the government should control this challenge with the help of technical and engineering service exporters. A challenge created due to sanctions and according to which Iranian banks are not able to issue guarantees.

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